Ithaca Energy Inc., an oil and gas operator focused on North Sea production, appraisal and development activities, has completed the transaction entered into with MOL Plc (MOL) in April 2015 for the sale of its wholly owned subsidiary, Ithaca Petroleum Norge AS (Ithaca Norge).
The initial consideration paid to Ithaca was $60 million, with the company having the ability to earn future potential bonus payments of up to $30 million dependent on successful discoveries being drilled on Ithaca Norge’s existing licence portfolio between 2015 and 2017.
Ithaca said that, following repayment of the company’s Norwegian exploration financing facility and conventional working capital adjustments, the net cash payment received by the company at completion was approximately $30 million. These funds have been used to offset drawings under the company’s existing bank debt facilities, Ithaca explained.
The sale of Ithaca Norge concludes the Ithaca Energy’s restructuring and monetisation of the Norwegian operations acquired as part of the acquisition of Valiant Petroleum plc in April 2013.
Ithaca Norge, that will become MOL Norge, is pre-qualified as operator in Norway. Its portfolio includes 14 licences on the Norwegian Continental Shelf (NCS), and Ithaca Norge is operator of three of those licences. The deal doubles the size of MOL Group’s exploration portfolio, adding over 600 million barrels of oil-weighted net unrisked prospective resources.
Alexander Dodds, MOL’s Group Executive Vice President for Upstream, said:
“Entering Norway as one of the most investor friendly countries is an important milestone in our E&P Strategy. Norway will become a key exploration hub for MOL Group in the future and will help us to achieve our goal of becoming an offshore operator in the North Sea. We believe Norway has a best-in-class approach to exploration, and with MOL Norge we will have an excellent team in place.”